SEC creates five-year path as Robinhood pursues tokenized stocks

The SEC created a five-year Innovation Exemption for qualifying venues to trade tokenized National Market System stocks onchain. The framework allows permissioned automated market makers and liquidity pools. It also grants conditional relief to liquidity providers. Tokenized shares must retain traditional rights such as dividends and voting power. Issuers can object to third-party listings before launch. Blockchain securities can enable trading around the clock outside regular market hours. Trading must pause when the primary exchange halts the underlying stock. Vlad Tenev said Robinhood Chain offers roughly 200 tokenized U.S. stocks across more than 120 countries outside the U.S. Robinhood's existing stock tokens provide economic exposure to underlying U.S. securities. Robinhood Assets in Jersey issues the tokens. The tokens are not available to U.S. persons. The company says the tokens can be held and traded onchain around the clock subject to individual asset trading capabilities. Tenev has highlighted 24-hour access, instant settlement and fractional ownership as potential benefits of tokenization. The SEC framework is temporary and conditional. The framework is subject to limits on eligible symbols and trading volume. Issuer objections and compliance requirements could constrain adoption. Robinhood Markets shares were up 2.18% at $112.20 during premarket trading on Friday, according to Benzinga Pro data.